The home finance market has grown almost five per cent over the past year, thanks to a surge in mining activity, new data has revealed.
According to data from the Australian Bureau of Statistics (ABS), home loan approvals rose 4.46 per cent compared to May 2011 with Tasmania and South Australia being the only two states or territories to record falls.
First home buyers made up 17.8 per cent of housing finance commmitments in May, up from 16.8 per cent the month earlier.
Loan Market spokesperson Paul Smith said WA improved 16.37 per cent and Queensland 11.68 per cent, compared to May 2011.
“While it’s encouraging to see recovery in these two states, the base numbers from May last year were near record lows and the only place they could go was up,” he said.
Mr Smith said the growth in mining states, WA and Queensland, was further evidence of the two speed national economy.
He said the underwhelming results nationwide compared to April reflect a muted response from consumers to the RBA cutting its cash rate in May from 4.25 per cent to 3.75 per cent.
“The first rate cut in early May clearly did not influence the market, however the second rate cut in June should impact the ABS number we see in July and August,” he said.
“While the RBA stayed on the sidelines in July, the RBA will be keeping a close eye on the figures that come out in the next two months to gauge the impact rate cuts have had for the home loans industry.”